Study: Mich. Public Universities Rely on Tuition as State Aid Shrinks

Michigan’s public universities are becoming increasingly reliant on tuition for funding, with state aid accounting for less than a quarter of their general fund revenue, according to a state House Fiscal Agency report released Monday.

“If you look at it going backward, certainly state funding cuts have played at least a partial role in driving the level of tuition increases we’ve seen,” said Kyle Jen, the report’s author and deputy director of the Michigan House Fiscal Agency. “But then going forward, the point we’re at is tuition dramatically outweighs state funding in terms of where universities get their operating funding.”

Based in Lansing, the nonpartisan agency provides budgetary and legislative analysis to the state House’s Appropriations Committee and other members of the House. Jen said he and the agency had been working on the report for a couple of months.

Michael Boulus, executive director of the Presidents Council, State Universities of Michigan, said the report “nails it right on the head.”

“The issue is that over the last 10-15 years, state appropriations have fallen and student tuition has risen,” he said. “There’s a direct, converse relationship. One goes down, the other goes up almost dollar for dollar.”

The council is a Lansing-based nonprofit that advocates higher education as a public good.

State appropriations to public universities for operating costs on a per-student basis have been cut by about 30 percent, from $6,841 in 2000 to an estimated $4,796 this year, according to the report.

It also said state aid accounts for less than a quarter of general fund revenues for universities. At one time, state appropriations accounted for 75 percent of universities’ funding, Boulus said.

In dollars, the University of Michigan’s main campus in Ann Arbor has seen the largest cut in state appropriations, while Western Michigan University in Kalamazoo has had the smallest reduction, the report said.

State appropriations for U-M’s main campus were $9,674 per student in 2000-01 and are projected at $6,381 for 2013-14. At WMU, funding was $5,228 per student in 2000-01 and is projected at $4,637 for 2013-14.

At the same time, the average tuition and fee rate charged to an in-state undergraduate student has risen about 150 percent from $6,367 in 2000 to an estimated $15,891 this year, according to the report.

Tuition and fees at U-M in Ann Arbor have jumped from $13,699 in 2000 to a projected $27,147 this year, the report says; at Western Michigan, the cost per student climbed from $4,287 in 2000 to a projected $12,516 this year.

More than 250,000 students attend one of Michigan’s 15 public universities each year, according to the House Fiscal Agency report.

“Going forward, tuition will be more directly tied to a university’s operating costs,” Jen said. “So decisions about tuition that affect affordability really rest more in the hands of the universities.”